Exam%203%202105_20_C

Exam%203%202105_20_C -...

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+,-$"-./01 #2 34",#0"#$#5-"1 +,#26 7,4"0 8 =04> [email protected] 2#//#A-$< -$1?,B"?-#$ "4,02B//C6 61%81 /01 .6%--,**3" 9" :,(/1 ’*;& )*+, &%31 %&’ 6%-/ < ’(=(/- *4 >%&/01, ?@ &+371, *& /0(- P" >61%-1 (’1&/(4) /01 61//1, *4 /01 .0*(.1- /0%/ 71-/ .*3561/1- /01 -/%/131&/ *, %&-; DE3!F *********************************** G41? H >-<-?1 #2 [email protected], IJ F******************** K01? L#,5 M
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+,-$"-./01 #2 34",#0"#$#5-"1 +,#26 7,4"0 8 NO/4$P +4<0Q
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+,-$"-./01 #2 34",#0"#$#5-"1 +,#26 7,4"0 8 : 1. A reduction in government transfers ________, therefore shifting the aggregate demand curve to the ________. A) increases labor costs to companies and so increases investment; left B) decreases government purchases of goods and services and so decreases consumption; right C) increases the marginal propensity to save and so decreases consumption; right D) decreases disposable income and consumption; left 2. An advantage of stabilizing macroeconomic policy over economic self-correction is that_____. A) stabilization policies achieve potential output with a lower aggregate price level. B) economic self-correction can take several years. C) economic self-correction affects the aggregate price level, but not the aggregate output level. D) stabilization policies are particularly effective to address supply shocks. 3. Bush tax cut is expected to expire in 2012, and government plans to reduce military spending in 2012. Assuming all else equal, what is likely to happen in the economy in 2012 in short run? A) aggregate price level increases and aggregate output increases. B) aggregate price level decreases and aggregate output decreases. C) aggregate price level increases and aggregate output decreases. D) aggregate price level decreases and aggregate output increases. 4. If the MPC is 0.8 and the government spending decreases by $50 million, then equilibrium GDP will decrease by ____. Assuming no crowding out effect. A) $40 million. B) $50 million. C) $200 million. D) $250 million. 5. Two politicians are debating the best ways to spur economy. Congresswoman, Becky
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+,-$"-./01 #2 34",#0"#$#5-"1 +,#26 7,4"0 8 H Shopaholic, quoting "when I shop, I make the world the better place", says that we should lower income taxes so that households have more money to spend on goods and services. Congresswoman Elle Woods says that we should lower taxes on interest income so that
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Exam%203%202105_20_C -...

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